South Korea’s state-run creditors of Daewoo Shipbuilding & Marine Engineering (DSME) will pump additional KRW 4.2 trillion (USD 3.7 billion) into this shipbuilding giant hit by two consecutive quarters of multi-trillion losses caused by a falling number of newbuilding orders and further delivery delays in the offshore segment, The Korea Times reports.
However, the two leading creditors – the Korea Development Bank (KDB) and Export-Import Bank of Korea (KEXIM) – will provide KRW 2.6 trillion and KRW 1.6 trillion respectively, only after the world’s second largest shipbuilder carries out drastic restructuring measures.
KDB said that DSME needs to cut its exposure to offshore projects, which currently take up 50% of the shipbuilder’s orderbook, by 10%.
The company is also expected to cut around 300 jobs, as well as sell or liquidate its wind power unit and a shipyard in Romania.
DSME posted KRW 1.35 trillion (USD 1.2 billion) net loss for the quarter ended September 30, as well as KRW 2.39 trillion (USD 2.1 billion) loss for the quarter ended June 30, 2015. This was the company’s biggest ever quarterly loss.
The company’s creditors have already injected KRW 2.9 trillion into the faltering shipbuilder so far.
World Maritime News Staff